Published On : 06-Jan-2022
Beaches of golden-hued sand with hump-backed whales rising and dipping in the currents of the deep distant seas. Green hillsides, the muddy tracks and paths all leading to monasteries filled with mystics. Cities with skyscrapers and slums running alongside each other in partial if not perfect harmony.
The land just described is none other than the culturally rich nation of Sri Lanka. The country is an island in the Indian ocean, sharing no land borders with any other state. Shipping routes run through Sri Lanka from South East Asia to the Gulf, Africa and Europe. Despite its geographical proximity to premier trading nations in the region, Sri Lanka is troubled by a lack of foreign exchange, skyrocketing inflation and troublesome levels of trade deficit. Industrialised nations such as China, India, Japan are major importers of manufactured goods landing in Sri Lanka. The excessive trade deficit has resulted in essential food items and medicines’ prices rising to record levels. The Sri Lankan government will struggle to pay for its imports in the coming months due to the burgeoning debt repayments. They are already in talks with China, India and the IMF for bailout and aid possibilities. Read on to find out more about the trading possibilities that the crisis begets and what the future holds.
The nation exports arise mostly from garments manufacturing accounting for more than half of its exports. The industry employs about 15% of the nation’s workforce. Other top exports are agricultural items. Sri Lankan coffee, tea and spices also fetch premium prices in the global export market.
The most exported are consumer goods including apparel, tea, rubber articles, mineral fuels including oils, electrical equipment, textiles and fish. The top export destinations are the United States of America, the United Kingdom, India, Germany and Italy.
Due to the COVID19 pandemic, the Sri Lankan tourism industry took a massive hit which, along with other factors, has led to a foreign exchange crisis. Sri Lanka was running out of reserves to pay off foreign debt. They decided to therefore raise taxes and deter imports to shore up on reserves. This has led to a domestic goods shortage and inflation. Even farmers are finding it difficult to buy fertilisers and seeds for their crops. The nation has had to resort to paying Iran in tea exports to save up foreign exchange.
The primary Sri Lankan imports consist of mineral fuels, electrical equipment, machinery, intermediate fabric for value addition and plastics. Their top import partners include India, China, United Arab Emirates, Singapore and Japan.
Sri Lanka has depended on India, China and Bangladesh to alleviate their troubles in the short term. Although the high-interest rates that come with these injections can prove immensely detrimental. Sri Lanka needs the International Monetary Fund to supply the nation with reserves to help pay back its lenders. The economic mismanagement that has brought the nation to this grim place must be reformed and redressed.
Sri Lanka is a nation of great determination and perseverance. After decades of suffering under British rule, Sri Lanka, since its independence, has battled with the ravages of civil war and successive natural disasters. Their strategic position on the Malacca straits can make them an important shipping destination. With the help of its neighbours, Sri Lanka can turn things around with its working-class population and a post-covid rebirth of tourism.
Access the Sri Lanka export import database curated by Cybex Exim Solutions. Data-driven solutions help you weather crises and beat the competition. Contact us now at [email protected] or call(+911204517800) or WhatsApp(+9971093718) to access the latest Sri Lanka trade data.
